The 5 Basics of Condo Insurance Part 1- Dwelling Coverage

March 29, 2007No Comments

Insurance companies offer Dwelling Coverage, which generally insures the interior walls, drywall, wallpaper, paneling, flooring, carpeting, or built-in cabinets. This is the coverage you need to cover your part of the building; the unit you own.

As a condo association, you all take responsibility and ownership for the common areas, the exterior of the building, and energy equipment. The interior of your unit, however, is your responsibility, and it is important to make sure your real estate investment is protected.

Sudden, accidental tearing, cracking, burning or bulging of a steam pipe or hot water heating system

Dwelling Coverage does not cover damage caused by:

Earthquakes, floods, and in many states, hurricanes. If you want to insure your condo against these risks, you may be able to buy an additional policy or endorsement for each of these.

Theft by someone named on your condo policy as an insured party.

Do I need Dwelling Coverage for my unit?:

As noted above, your condo building Master Policy might have coverage for your unit. Find out if you have coverage and, if so, how much coverage and at what deductible.

Important note on condo docs: In some rare cases, your condo documents might say something different than your Master Policy. If your Master Policy says your unit is insured for dwelling, but your condo docs say otherwise, the condo docs win. A claim adjuster would default to what the condo docs say, and you wouldn’t have coverage. Make sure your condo docs state the same coverage as your Master Policy.

If you have no coverage with your building policy, you should purchase dwelling coverage for the full replacement amount.

Even if your building Master Policy provides some coverage for your unit, most condo owners still like to take out dwelling coverage for their specific unit, often around $10,000 with a $500 deductible. This is due to master policy limits, high deductibles, and condo document discrepancies.

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InsureOurCondo.com is a website operated by Brownstone Insurance Agency of Norwell, MA. Our goal is to provide tips, articles, and guides to help you find the right insurance for your condo; including individual condo unit owners and their homeowners insurance, as well as condo associations and their master building insurance policy.
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